office. impact,limited market but south korea ready to react if necessary. haslinda: it was all smiles in october, but relations between china and india are increasingly strained as the border dispute turns deadly. yvonne: certainly geopolitics at the forefront. we are checking markets. we are seeing that euphoria stall in the asian session. asian stocks looking mixed despite the upbeat session we saw in the u.s. u.s. retail sales was a big beat . u.s. futures still slightly under pressure. asian stocks also slightly lower. jakarta coming online. seeing a little bit of green. nifty futures. the ties between china and india tested once again out of that border standoff which left 20 indian soldiers killed.

studied after a jump overnight. -- steadied after a jump overnight. you are seeing the likes of the aussie, which gained a bit yesterday, off those highs. u.s. 10 year yield snapping out of three days of gains at 74 basis points. brent crude sliding on concerns of that second wave in china. as we mentioned about geopolitical tensions, we are moments away from hearing south korea's presidential office briefing on the north korean situation after that liaison office was bombed yesterday. we are seeing a little bit of reaction with korean assets. not a whole lot when it comes to the stoxx, although you are seeing -- to the stocks, although defense stocks are up today. the won taking it on the chin.

weaker by 6/10 of 1%. vol spiked up just slightly. haslinda: geopolitics adding to marketweaker by 6/10 concerns. china has ordered all schools in beijing to close as it struggles to hold a new coronavirus outbreak which has already spread to neighboring provinces. let's head to the capital and our china correspondent selina wang. how serious is it? selina: beijing has lifted its emergency response level to the second highest and said people will have to be tested for the virus before being allowed to leave the city. that on top of the decision to close schools signals the severity of the growing crisis and the stakes to contain the spread are very high in beijing. an aggressive lockdown would risk undoing much of the economic reopening in recent weeks. that explains why you are seeing

official take a targeted approach compared to resurgence is in other regions -- resurgences in other regions of the country. ride-hailing apps have been banned from leaving the city. most forms of transportation to and from beijing still remain open. this is as the total number of infections surpasses 100. you are resurgences in other regions of the seeing the city roll out an aggressive testing and contact tracing plan. beijing says a contest over 90,000 people a day. test over 90,000 people a day. also a trading executive with a major supplier told bloomberg that port authorities are conducting nucleic acid tests on all shipments of imported meat. this is as we learn the virus may have come from salmon as the

virus was found on a cutting board for salmon. as a result you have seen salmon removed from many grocery stores and ports in the city. yvonne: you mentioned a little bit about this. do you think they will focus on a targeted approach? at what point will they have to implement stricter measures? is the mass testing enough? you mentioned testing meat as well. what more do we know on that? selina: officials say as many as 200,000 people have been to the market since may 20. the market where the virus was found, that supplies 80% of beijing's produce, fruit and vegetables. a lot of people say that market will be a challenge to test everyone who has been in contact with them. you are seeing hundreds of sampling booths set up across the city to test people for the

virus. the capacity of checking 90,000 people a day is aggressive. there seems to be confidence among many in beijing that this can be contained, given what china has learned from the approach in other places, including in wuhan. our sources say not only are they conducting these nucleic acid tests on shipments of imported meat, but officials have started testing every consignment in shipment, instead of just taking some samples. the city government of beijing said it tested more than 2000 samples of food items that have all been up to standard. they have closed 11 other markets, as well as ordered the testing of tens of thousands -- of disinfecting of thousands restaurants across the city. yvonne: selina, thanks for the update. we want to update you on a situation out of seoul.

the presidential office is commenting on the north korea issue, where they bombed that liaison office yesterday. the south koreans are saying they will not tolerate north korea's senseless remarks anymore, saying kim jong un's ander's remarks are "rude" allt north korea should bear consequences from their actions. they are asking pyongyang to be more polite to south korea. those are the latest lines. kcna the south kcnans -- we heard from the south koreans brought envoys to hear from the north. a lot of questions on what comes next. more on that story later on when we are joined by our guest at the bottom of the hour. karina mitchell joining us from new york. karina: north korea says it will

deploy troops to the border at kaesong.omplex local stocks jumped. tensions have soared after kim jong-un's decreasing powerful sister -- increasingly powerful sister has split with seoul. japan exports slumped in may after idol factories at home. the value of shipments fell 20% by a year ago, the most since 2009. exports declined for 18 straight months. japanese exports to the u.s. for the month of may fell 50% from a year ago. shipments to china are back to where they were. virus numbers continue to rise in the u.s. florida reporting the most new infections since the pandemic struck. texas had its highest level, although california saw its slowest daily gain in three weeks. the overall u.s. death toll

exceeds the number of americans killed in world war i. the university of chicago says people are more unhappy with their lives today than at any time in the last 50 years. a year of street protests and the coronavirus pandemic has seen unemployment in hong kong rise to its highest level in 15 years. the jobless rate rose to 5.9% in the march to may period. the job market is at its worst since 2005, when hong kong was recovering from the sars outbreak. the chairman of san miguel has died. a former ally of president ferdinand marcos was forced into exile in the 1980's before returning to remake the philippines's largest food and drink company. he bought the local coca-cola franchise and expanded the company into energy. he was 85 years old.

global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. ahead, jd.com will make its hong kong listing on thursday. we ask citigroup's head of asia research whether the stock will deliver. fears of aut next, resurgence of coronavirus in china darkening the outlook for an economic revival. we speak to dbs head of economic research coming up. this is bloomberg. ♪

>> first was the shutdown. we saw what that would produce, which was sharp declines in

economic activity and large increases in unemployment. that was q2. we may be reaching the bottom line now. >> there is downside risk to the recovery, and there is upside. a lot of which it is going to be, in my view at this stage, is going to have less to do with monetary and fiscal policy and a lot more to do with how effectively we execute the health care policies. >> i judge that measures of longer-term inflation expectations were when the downturn began at the low end of the range that i considered consistent with our 2% inflation objective. given the likely depth of this downturn, we are at risk of falling below that range. haslinda: some big names from the u.s. federal reserve talking about the outlook for the u.s. economy. yvonne: let's bring in our next

guest for some insight, taimur baig, managing director and head of research at dbs investments. we heard from chair powell saying the economy may have reached a bottom. you pair that with the retail sales number overnight, and it seems like things are bouncing back in a big way. s this mass divers encz in -- divergence in the economy finally convergent, would you say? taimur: we are not converging. the financial markets are not only pricing in little risk from amid our better knowledge of social distancing, that it would not be devastating, but markets are not pricing in a lasting impact from the crash in commodity, that companies will remain in business because of ample liquidity and low rates. those are rather heroic assumptions. to me, the risk is a symmetric.

we are pricing in lots of good stuff and discounting every possible bad stuff. from a risk reward perspective, i would be very cautious. yvonne: what would that mean for treasuries? two you think the treasury market has been pricing -- do you think the treasury market has been pricing it right, or too optimistic at this point? taimur: correct. the bond market is chairing the optimism -- is sharing the optimism of the equity market, long-term growth expectations are going up, and therefore you don't have to expect depressed deflationary outcome for 5 to 15 years. you will see healthy returns over the long run, and therefore more than crisis level interest rates to be paid for over the long run. a steepening of the curve is a

bullish signal as far as i am concerned. it means the smart money is no longer pricing in deflation and depression. said it ishe fed has buying corporate bonds. investment-grade yields are headed to record lows. and if so, how low? taimur: the fed's perspective is of the steadyn ande equivalent rate low, what the fed can do to make sure conditions are not tight relative to that. when things looked good in 2019, the fed cut rates. i think we are in a similar situation now. the fed has to give considerably prolonged signals for curves to remain flat and rates to remain

low. i don't think this narrative can go on for a long time, especially if we do see the economic outcome heading closer equity marketl view's are. fixed income market tends to be more right than wrong, in which equity market view'scase may be the fed is alo right. haslinda: give us your understanding why the fed sees it necessary to buy corporate bonds when it continue to expand its etf buying. what is the goal? taimur: we saw this issue play out in many episodes over the last couple years. the view has been there is no need to do a lot more and the fed surprised us by doing a lot more. rate cuts or qe or

these unconventional asset purchases -- every case, it seems like the fed's view was if you did not do more, it would undermine the recovery or financialthese market stability. you may see a big run up in equity prices. you may have seen compression and bond spread, but the fed is looking at lasting damage coming out of this lockdown. a lot of companies stressed before the crisis will be tipped into bankruptcy going forward. hertz being a prime example. this is why the fed is buying assets across a wide range of spectrums, bonds at various rating levels, to make sure things don't worsen. you are firmly on the steepening camp. we are not seeing that trend in china. yield curves there have flattened recently. do you think pboc policymakers are willing to tolerate this

selloff in government bonds? taimur: this is a critical question for us. we are as we speak looking closely at this issue. to us, the bond market dynamic in china is more interesting than what is happening in? it's now. now.ppening macroou look at broader aggregates, it has been fairly constructive over the last four or five months, far better than what the economic numbers would suggest in china. it is not a function of tightness in liquidity, but more greater demand for loans. on the margin, more bigmmodation by pboc, no bazooka like the fed. certainly more easing coming up. not necessarily in response to a

crisis-like situation, but to arrest the uncomfortable trend if it were to materialize. yvonne: we saw with the may data that this recovery in china is much shallower than expected. is there anything they can do to avoid another negative gdp growth trend in the third quarter? can china essentially avoid getting into a recession? taimur: we are not happy with the numbers. we thought it would be better, especially when you are looking at the daily data. we get a lot of daily information from china. may data should not have been that bad. we were caught surprise. with may available to us, no matter what happens in june, very hard to see what would allow china to come up with its positive growth number for q2. this might inject some degree of

urgency among policymakers, which by all accounts have been far more reticent in terms of taking accommodative measures than their counterparts around the world. q2 could well turn out to be negative. yvonne: taimur baig, managing director and chief economist at dbs research. an update from south korea in this presidential office briefing. they are saying north korea will pay if it takes military actions.

haslinda: oil demand may not fully recover until 2022 ea.ording to the i

fatih birol told bloomberg where he sees consumption bouncing back. faith: we are seeing demand getting stronger. think less weaker than it was thought before, mainly driven by china. china's oil demand, as we speak now, is basically equal to what they had before the crisis. >> what would you predict price will do given the demand elasticity that you describe? i don't want to quote to the pennies, but give me a sense of what oil does from 40. i mean, higher, lower? faith: there are so many uncertainties. rebounds, as it is expected by all the financial institutions -- second, if there

is no wave of coronavirus, i expect oil production remains at these levels and giving a boost shale producers in the united states. ieane: that was the executive director fatih birol. oracle fell in late trade after reporting sales fell short of expectations. revenue declined more than 6% to just over $10 billion, signaling the virus followed and ensuing recession have triggered a pullback in corporate spending on i.t. oracle is still trying to catch up after being caught off guard by the switch to cloud computing. apple aims to reopen at least 75 stores across the u.s. this week, including in major locations such as new york, los angeles, and boston. all outlets apart from china were closed in march as the coronavirus spread and apple

begin a phased reopening. this week should see the majority of its 271 domestic outlets reopen, although some will operate sidewalk service only. a malaysian casino hospitality conglomerate is to trim around 3000 jobs of its workforce of 20,000. the group is backed by a malaysian tycoon and also has casinos and resorts in las vegas and singapore. they have been struggling under lockdown because of the coronavirus pandemic. haslinda: still to come on the show, we look at rising tensions on the korean peninsula with one of the leading authorities on the north. he joins us from seoul next. this is bloomberg. ♪

>> 10:29 p.m. in new york. president has signed an executive order to curb police brutality following the death of george floyd in minneapolis. he expressed sympathy to those killed by police, but he made it clear he will not move from his law and order stance. meanwhile, india's financial hub has revised its virus numbers, adding 862 fatalities. after discrepancies from filings

and counting centers, the new data shows more than 3000 fatalities, up 11%. authorities say all cases record covid-19 as the cause of death were not integrated into the database. indonesia, with them saying economic growth will suffer with gdp as low as 0%, with a full-year contraction. the finance minister says the economy will probably shrink by 3% in the current quarter. a rebound is foreseen in the following period. rising tensions between beijing and washington. china is leading the u.s. market at the fastest clip since 2015. buyout while to a a group back by tencent is to take bit auto private.

global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. yvonne: a quick look at the markets, things looking tamer than yesterday. that boost from the fed, southeast asia slightly lower. the dollar a little higher today, and stronger. yield, wes. 10 year are snapping out of yield tick up. seems like the recovery of the economy in the u.s. with the retail sales number is overshadowing second wave concerns. you are seeing pressure i comes to hong kong and china. beijing is the main focus with

the capital shutting down schools after a new cluster of cases focused on this market. they massively started testing people. 1%.kospi down more than more rhetoric from the south koreans on the back of the north korean side bombing liaison offices yesterday. they say the north will pay if it takes military action. jim jon jones sister has been senseless and rude, they say. sister has been senseless and rude, they say. reunification, the piece stocks are going the opposite direction. , elevators, all falling today. with korea.t's stay

the south's official news agency says soldiers will be stationed in the west near the offices that kim jong-un ordered destroyed. joining us now is dr. andrei lankov, professor of history, kookmin university. latest us about why this provocation, is it part of a strategy to get trump to ease sanctions? dr. lankov: yes. claim, weo what many .o not see many indicators food supplies are stable. currency exchange rate, but the economy is actually not crumbling but under great pressure. they would like to get out. as you have said, it is a

battleground strategy to push south korea to do something. the south korean government, in spite of being friendly, a lot of smiles, are doing virtually nothing. eoul cares about good relations with north korea, but it cares more about good relations with the united states. north korea is important, but the united states is far more important. north koreans do not like it. they decided to create tensions to exercise pressure, show their superiority, to demonstrate to south korea that not only washington can create trouble. it is only just the beginning.

i am sure there will be a serious acceleration in the months to come. haslinda: we heard this morning this out saying north korea will pay if they take military action. you see the north resorting to that? what could be the next move for north korea? dr. lankov: we have to be careful. is south korean government very careful and reluctant to provide north korea serious economic aid because they care about negative reaction from the united states. on balance, they would try to play down predictions. having said that, it seems the north koreans in their statements have outlined what they are going to do. the will start demolishing

south korean property, unused and abandoned. peace, the south koreans can do something. the north koreans are demolishing south korean property. next it could move on the area closed down for 12 years. then they can do some actual shooting. maybe in some areas of south korea. show, political theater launched by right-wing conservative groups inside south

korea. yvonne: some say this is not about leaflets, just an excuse to get attention. dr. lankov: it was not. yvonne: and to sell discord between the u.s. and south korea. what can moon do? has flatly rejected envoys to talk. they ended diplomacy in some way. what are the next moves for moon jae-in? dr. lankov: sit tight and try to play out the crisis. what can he do? he does not want to get into trouble with the united states. he does not want to get into trouble with north korea. aobably the united states is

problem for him. he will not get into north korean pressure. preparing for it for months. they said, give us money, give us subsidies. you used to do it 15 years ago and promised to do it again, do it now. we do not care about your relations with the american imperialists. maybe some around moon would like it, but he would not. defusesmile to try to tensions. what else can he do? he does not want conflict. he will try to wait out.

picturese are showing of kim jong-un's sister. we have heard about her a lot in the last few weeks, upright speaking to the media. they have been rejecting south korean envoys. she havepower does now? is she more than an ally of kim jong-un? she is not calling in every morning. she is extremely prominent now. there is no doubt she is number two. she has always been powerful. powerful.eptionally

she is acting as a deputy. it is probably related to the health problems of kim jong-un. even the south korean government does not like to talk anything bad around north korea, and is trying to stop the rumors. kim jong-un has some medical problems. obviously acting as her brother's replacement. like an acting president, or vice president or vice dictator of north korea. there is a sense the has allowed north korea to develop its nuclear capabilities. how much progress has been made to that end? dr. lankov: you mean progress

with nuclear development? haslinda: yes. dr. lankov: the north koreans are working hard on their nuclear facilities, but they have some technical problems to before they can destroy the city of new york, which is their goal. alder -- allhat, is to annoy south korea, not the united states. best withs do their the relations with south korea to separate them from the united states. koreans should know their place and not mingle in relations in north korea.

all the statements are clearly deliberated. year they annoy the united states of america. not now, maybe three months later. they are designing new icbms, better warheads, but they will not tested anytime soon. -- they will not test it anytime soon. itnne: we have to leave there. thank you so much, dr. andrei lankov, professor of history, kookmin university. coming up, the hong kong listing on thursday. on whether the stock will deliver tomorrow. this is bloomberg. ♪

jd.com is poised to become this year's second largest share sale globally. their debut in the city comes a and whenr netease, growing tensions between washington and beijing are pumping chinese companies in the u.s. to consider alternate venues. joining us now is alicia yap, managing director & head of pan-asia internet research, citigroup global markets asia. thank you for joining us on the eve of this secondary listing

for jd. what does homecoming mean for the company, and will it be the same fate as the alibaba listing? alicia: i do think so. netease last week, i think jd tomorrow will have a similar range. it seems like the threats we are hearing from the u.s. is overshadowing hong kong's own political troubles as international hub. when i look at these adr's in the u.s., most are owned by u.s. institutional investors, jd.com included. how will it be for any investor base to switch to hong kong shares, and could that affect the liquidity and demand?

alicia: so far, if you look back adr ist six months, the doing better, slightly better than hong kong. -- ifrted to see more they do not have restriction outside the u.s., they are moving shares converted to hong kong. we could see a similar pattern for netease and jd. for the u.s. investor, if they do not have a restriction, they would likely switch some holdings into hong kong. the reason is because it is getting closer to the market with the news flows happen in the daytime, and you can trade in the same time zone.

in hong kong making decisions in the region, that will be helpful for them moving shares to hong kong. over time, we do not know the outcome in three years, but we expect more shares moving to hong kong which on the liquidity side will get better over time. think itow do you impacts the adr's? will it hurt her boost them? hong kong trading at a discount in the u.s., and there is concern they made the list in the u.s. look over the past six months between the adr and the hong kong share give or take roughly 2% adjusted for the

foreign-exchange difference. for only one week we did not see too much difference. we would think jd would trade more narrow, the ali difference is the exchange rate. -- the only difference is the exchange rate. on the hong kong side on retail, [indiscernible] side it mightion be cheaper. electronically in the adr market. the discount is quite small to our understanding. the online space is increasingly competitive.

what are the risks for jd's outlook giving the increasing competition? the e-commerce space with a lack of competition ever since jd was found in many years ago, 17 years ago. i would say right now if you fromat the markets, moving off-line to online, the market is still growing. jd, on top of the retail asiness, they have built up sizable business and even into the health care business. when you look at jd from now going forward, we should think about more than just retail or e-commerce business, especially

in terms of the future prospects. , managingalicia yap director & head of pan-asia internet research, citigroup global markets asia, thank you so much for your insight. still to come, a skirmish turns deadly in the himalayas. we will have the latest on india and china. this is bloomberg. ♪

haslinda: a seven-week military standoff between india and china has turned deadly on the himalayan border to the first time in more than four decades. let's get more from new delhi. what sparked the clashes? the latest round of 5 whenties began on may india said china surprised it deploying troops high in the himalayas along the disputed border. it seems india's decision over the last year to bring the region under federal control seems to be the main reason for the tension now. we have seen skirmishes over the past seven weeks, but it escalated on monday and resulted in deaths on both sides.

it is unclear how many. we have seen 20 dead out of india. has casualties, but no details on that yet. ago we it was days thought things were de-escalating on the border. it comes at a difficult time for modi. has he said anything about the conflict? >> no. he has been silent on this. cause for him to step up and say something. it is worrying on the domestic front to have this dispute playing out. it is the last thing prime minister modi needs. now because of a virus having its health care system

overwhelmed. many will be struggling to survive. for modi to lose that many soldiers in a class with china will pile on the pressure for him domestically. haslinda: we have heard little from china. any sign this could escalate? while this is the most serious clash in years, it will serve neither country to escalate. he has injected further tensions into a relationship that was already under pressure over trade, indian china's relationship with the u.s. standoff is going to be .ifficult to step back from that was her southeast

asia government reporter joining us with the latest out of new delhi, and that standoff we saw. india futures lower by 0.7%. geopolitical tensions will affect the mumbai session later on. thesee more of a stall in asian equity rally we saw yesterday, given from the shop by the fed. --shtot by the fed. new infections in beijing. the kospi is the focus, given the geopolitical tensions between north and south korea, shares down 0.8%, marginally lower for singapore. the dollar is a little stronger and that is impacting em markets .ike malaysia, down 0.4% steady when it comes to manila and jakarta. haslinda: all on the back of a volatile session in the u.s. keep it here with us.

this is bloomberg. ♪

haslinda: it is almost 11:00 a.m. in singapore. i am haslinda amin. rishaad: food markets and restrictions, and blocking potential virus carriers from leaving. threatensnorth korea a liaison office.

rishaad: top-flight sport emerging from the virus locked down there is one thing missing, the fans. how sports can be safer for all involved. haslinda: a check on the markets. the asian market is stalling right now, investors weighing recent value and risk assets and economic optimism versus the resurgence in the outbreak. u.s., the session in the the s&p ended up higher more than 1%. and a ci asia-pacific index down -- and a ci asia-pacific index is down. north korea moving troops to areas near the border to send a strong signal. --southorea says it is korea says it will pay if they

take military action. beijing shutting down all schools amid a second wave of the virus. the hang seng is flat at this point. are in termsre we of the southeast asian markets. emerging markets have been lagging. at the valuations, they close to 10 year average. stocks under a lot of pressure, dropping the most in two months just this week. rishaad: to the currency markets, regional currencies -- what do we have for them? strength.ollar you can hardly call it that at the moment. to renewedwon, down tensions at the forefront.

we'll markets -- oil markets, two big gains being snapped amid a second wave of cases in china. on stocks in the u.s. showing them swelling due to the demand picture. this is where we are currently. , not much of awn flight to safety. the nifty market weighed down by fresh tensions. are.is where we china is ordering all schools in beijing to close. the capital is struggling to halt the virus from spreading. at the newing

coronavirus cases that have been thought to be contained spreading to neighboring provinces. let's go to beijing and join selina wang. how serious is this? feela: it just started to the past couple of weeks that life in beijing was getting back to normal. now we are seeing the restrictions. beijing has increased emergency response levels of the toond-highest, in addition closing schools. people will have to be tested before being allowed to leave the city. this signals the severity of the growing crisis, and concern from authorities to prevent this from becoming a major resurgence. the stakes to contain the spread are extremely high. they want to avoid the most undossive lockdown and not the economic reopening we have seen in recent week's.

that is what you are seeing officials take a targeted approach compared to similar resurgence is. only some residential compounds have been shut down. taxis and ride-hailing apps have been banned. out an is rolling and contactesting tracing plan. it tested more than 70,000 and have a major test ahead of them were 200,000 people have been to the market on may 30, and that is the market which has been linked to the new cases in beijing. our report has china starting intensive testing of imported meat. why, and what do we know? after theis comes atbreak had been traced to

chopping board used by the seller of imported salmon. salmon is being removed from grocery stores in several major cities because of that. there is a fear the virus could be coming from imported produce. trading executives for a major supplier told bloomberg port authorities are conducting tests on all shipments of imported meat. instead of taking samples, customs officials are testing every consignment within shipping. the beijing government tested more than 2000 samples of food items so far, and they have been up to standard. it closed 11 other markets, as well as ordering the disinfecting of tens of thousands of restaurants. china's: meanwhile, border skirmish with india has taken a deadly turn.

what do we know? selina: this is the worst conflict in four decades among the himalayan border, and it is unclear what sparked the classes. both sides are quick to blame each other. china said india crossed the border to conduct illegal activities and launched a provocative assault. india says the class happened as a result of china tried to the statusy change quo. we do not know how many died in the violence. india confirmed 20 of its troops were killed. china said there were casualties on both sides without elaborating. political analysts say india and china do not want further escalation, particularly india where military officials -- military forces are not as powerful as china's. countries have nationalistic leaders.

neither have pursued a forceful foreign policy, but are in no shape to increase escalation especially as they are deeper into an economic and health crisis caused by the pandemic. the editor of the global times in china warned india not to be arrogant. china does not want a class with india, but does not fear it. selina wang in beijing. the asian infrastructure investment bank approving $750 million in loans to india for its covid-19 response. india is struggling to deal with the crisis. it is emerging despite a rice tarif cases.-rising

get the first word news with karina mitchell. karina: north korea says it will deploy troops to the border after destroying a shared liaison office. global defense-related stocks jumped along with similar companies in neighboring countries. tension has soared after kim jong-un's powerful sister said it was time to split with seoul, and a next move would be taken either army. virus numbers increase in the u.s. with florida having its highest levels. california saw its smallest daily gain in three weeks. the overall u.s. death toll exceeds the number of americans killed in world war i. the university of chicago says people are more unhappy with their lives today than at any last 50 years.

virus deaths in indonesia at 40,000 with economic growth suffering. the outlook for gdp is being warnings of the finance minister says the economy will shrink by 3%, although a rebound is foreseen in the following period. morgan stanley fighting a lawsuit from its head of diversity, alleging systemic racial discrimination against black people at the bank. senior white leadership members refused a plan to address bias. morgan stanley said it rejects the statement, and will vigorously defend the suit. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell, this is bloomberg. we have a 100 day

absents of the english premier league, and it is back later today. we speak to the ceo. next, the president of the dallas fed says the u.s. could recover faster than expected, but that depends on the public health system. our interview with robert kaplan is just ahead. this is bloomberg. ♪

>> we have seen what the shutdown would produce, very sharp declines in economic activity and increases of unemployment. q2, and we may be reaching the bottom on that now. rishaad: federal reserve chair jerome powell saying the

american economy may be set for significant improvements in employment. it was a videoconference before the senate banking committee. president of the dallas fed says the u.s. economy will see strong growth from here. spoke exclusively to bloomberg's kathleen hays. robert: i have felt strongly that after severe contraction for the first couple of months, first half of this quarter, that we bottomed out in early may. continueect growth to to the end of this quarter and into the third of fourth quarter. i think this uprising jobs number and strong retail sales is part of the narrative. we will grow strongly from here. let's dig more into what you just said. is this going to be perhaps a

faster recovery than a lot of people are looking for, including people at the fed? possible. there is downside risk to the recovery and upside. a lot of which it will be, in my view at this stage, is going to have less to do with monetary and fiscal policy, and a lot more to do with how effectively we execute the health care policies. know you're not a fan of negative rates. piecewas an opinion this week that said you are making a mistake and negative rates would boost employment, help businesses, encouraged lending from banks. he said by not doing this, you are favoring banks over people. what is wrong with that argument western mark --what is wrong

with that argument? , the jury is out as to how effective they have been, and whether they have helped growth. in addition, there are side effects to negative rates, and negative impacts on the .inancial system we have a large money market industry in this country, and many companies access commercial paper which depends on a healthy money market industry. my concern is negative rates may do more damage and have more side effects. it is not clear to me that the benefits are. when you were talking this week, you mentioned signals from the market could be distorted. a steepening yield curve can send everybody a message, policymakers included. why would you consider going for

a policy that will destroy market signals you say are so important? as i have said, i am skeptical about yield curve control, and at the moment i need to be convinced of the reasons for it. having said that, what could happen is we have a substantial government debt that needs to be issued. and we had a substantial amount before this crisis that has gotten exacerbated. as we are in this crisis, while we are still in it, if i saw evidence that treasury yields were being strained because of the substantial amount of debt issuance, that would be one argument that would cause me to examine yield curve control. i do not see evidence of that, which is the reason i am skeptical. but i want to be open-minded.

was dallas fed president, robert kaplan. coming up, whether the resurgence of the virus in china is changing the view. this is bloomberg. ♪

haslinda: as we mentioned, jerome powell says the u.s. economy may be bottoming out. investors are weighing the , and may be overridden by a second wave of the coronavirus. banks willest says help economies gradually recovered to pre-virus levels in the fourth quarter. that's bring in kelly chung, senior fund manager, value partners.

given expectations of a gradual recovery in q4, it is a good time to deploy cash when there is a selloff. kelly: yes, i believe so. actually a couple weeks ago the market rallied quite dramatically because people expect a v-shaped recovery. the economic data and consumer data suggests these injections and spending, these numbers are better than expected. in a v-shapedcing recovery. however, with the risk of a second wave, and the political uncertainties coming, we believe it may not be a v-shaped, but a u-shaped recovery going into the second half. then it will reach the precrisis levels in q4. that is why i think the market

will need to make an adjustment in the coming weeks, because people have been pricing in a sharp v-shaped tarif. it might disappoint. be a good time to prepare for a new recovery for the second half. haslinda: my comes to are lackings, you asian stocks, trading at the highest levels in 10 years. most expensive in 10 years. where do you see value? terms of absolute valuation, it may not be very attractive, but if we look at u.s. equities or risk premium versus the bond, it is very attractive. asian equities are trading at a

35% discount from u.s. equities, more than one standard deviation versus the history. equities areasia attractive, and given the low interest rate versus the bond yield globally. than actually much higher the bond yield, so we perceive value in asian equities. and because of gold, central banks on easing mode and not supportive in terms of purchases , they have ample liquidity in the market. will drive people into risk assets. , we think it will continue. the foreign capital will move back to asia.

within asia, do you find the emerging markets are problematic even though they are likely to play catch-up? prices could impact emerging markets in asia. kelly: i think we have to be , definitely emerging markets as a whole are lagging behind the u.s. and europe. north asia within emerging markets. casesamerica, a number of .nd in eastern europe we prefer asia with emerging markets. within asia we prefer north asia, particularly taiwan because they are dominated by

the technology sectors. they have strong order demand not only from the factory but the in sourcing from china. we will be selective in emerging markets, and we like asian emerging markets. going back to value, the question should not be about what valuation does a company company,, but what what value a company deserves. how do you find that? when we talk about value, valuation of the

companies. if we talk about the style, the past couple of weeks this has --n tougher because [indiscernible] we think for the value sectors , we need arm v-shaped recovery. in the past couple weeks people were expecting that, so it started to outperform. and it is morect of a u-shaped recovery and the people will goen back to companies that have sustainable growth. we think the rally in the last couple of weeks may not last too long.

were willing to pay for companies that have sustainable and high visibility in terms of growth. for those companies and sectors that have growth, people will be willing to pay higher valuation because in this market they are willing to pay higher multiples to deliver growth. much,d: thank you so kelly chung, senior fund manager, value partners. this is what markets in shanghai and shenzhen look like. beijing hase in caused schools ordered to be closed. it has already been spreading to

neighboring provinces. chinese markets are closed for lunch. japan reopens right after this. ♪ save hundreds on your wireless bill

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♪ haslinda: 11:30 a.m. in singapore. we are in the middle of the trading day. it is a risk off day pretty much across asia. singapore maine exports contracting 4.5% year on year, worse than expected. anerts pointing to expansion. economy that is so open, susceptible to all the movements in trade. it is expected to have its worst

contraction in terms of gdp since independence back in 1965. let's get the first word headlines with karina mitchell. >> china has reimposed district virus curves in beijing, closing all schools and shutting 11 markets amid fears of a second wave of infections. residential compounds in high-risk areas have been closed to visitors. only residents who tested negative can leave the city. casesconfirmed another 44 overnight, including 31 in the capital, bringing the total to 140 since friday. financial hub has added 860 two fatalities to its virus numbers after discrepancies. --bai virus debts sword deaths soared to over 3000. all cases reported covid-19 as the cause of death but were not integrated into the master

database. new zealand's prime minister has called in the military to enforce border controls after two women who arrive from the u.k. were allowed to leave quarantine early, then tested positive. the first in three weeks, ending new zealand's being virusd of free. president trump has signed an policeve order to curb brutality amid widespread protests following the death of george floyd in minneapolis. he expressed sympathy with families for those -- sympathy for families. he praised officers as heroes and blamed democrats for long-standing issues among minority communities. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg.

>> let's have a look at what is going on at the moment in light of renewed tensions between south korea and north korea. pyongyang destroying that liaison building. -- seems to be taking a stronger line with the northern neighbors , saying at the moment in essence that they are, i suppose, not really that bothered by what's going on currently. our chief north asia correspondence tracking this -- corresponded is -- correspondent is tracking this. >> the north koreans, they want l to back off and not support the continued global u.s.-backed to sanctions on pyongyang.

they are not necessarily getting that level of cooperation from the government of moon jae-in. they did blow up a joint into inean liaison office -- liaison office. they are talking about moving the military back into border areas. they could possibly reopen those 10 frontline guard posts that were closed since 2018 when moon jae-in and kim jong-un had that reproach moment, which has soured quite a bit over recent tensions. the presidential office eoul has had in s a press conference and they are taking a bit of a harder line than initial reaction from south korea. the presidential blue house

saying that north korea will pay if it takes military actions, also saying that the sister of kim jong-un saying that the remarks on south korean leader moon jae-in were rude and south korea will not tolerate north korea's senseless remarks anymore. stephen, it seems like kim jong-un's sister is taking a more prominent role. >> right. she has been the one that has been more out in front in the face of this regime, if you will, in the last couple of months. of course, kim jong-un did fall from public view for nearly three weeks in april before reappearing, supposedly, i should say, on may 1 at a factory opening. still, she has been the one making these comments, including on saturday, saying it was high

time to break ties with seoul. she called south korea the enemy and that the next action would come from the army. sure enough, we did see that action at the liaison inter- korean office yesterday. she is also the one who responded to moon jae-in. she responded to a speech he gave saying moon's speech is irresponsible. she is flatly rejecting a seoul to send an envoy. she is clearly kim jong-un's most trusted confidant, number two in the hierarchy of the bloodline. this is a dynastic regime. has she earned more trust from kim jong-un or is he somehow incapacitated? because that fall from public view in april raised a lot of questions about his health.

keep in mind as well, she is the head of the propaganda and agitation department of north korea. maybe she is just doing her job, agitating. haslinda: she was also there at the last summit between trump and kim. chief north asia correspondent stephen engle. of president ferdinand marcos has died. he was forced into exile in the 1980's before returning to regain and remake the rgest food anda drink company. he bought the local coca-cola franchise and expand the company into energy. low withfacing another south asia's top ride-hailer facing --

singapore-based grab also plans to eliminate non-core projects and reallocate stocks to other areas. transpacific insurance has sold more than $2 billion of global -- listed in london. it is the biggest ever european stock offering from a chinese company. investors bought in at $17. trading begins later wednesday on the lse london shanghai stock connect. is said to have approached -- about a stake in -- report inge on the new york. it is not sure if tencent approached ige directly about a potential deal.

, a border dispute high-end the himalayas turning himalayashigh in the turning deadly. this is bloomberg. ♪

♪ a seven-week military standoff between india and china

turning deadly along their contested himalayan border. the first time this has happened in this sort of serious fashion in more than four decades. ruth, what is this really all down to? what sparked these clashes? is it in essence that beijing looking at india cozying up to the so-called quad, as it were, involving australia and other countries. >> there are certainly tensions between china and india over the quad. it was sparked i think by the construction of a bridge in the contested territory. it also seems to be driven by andy's decision last year to decision last's year to bring -- under indian control. it seems to be one of the main reasons for the tensions now.

there have been skirmishes over the past seven weeks, but it really escalated on monday and has resulted in deaths on both sides, although it is still unclear how many. days earlier, it seemed like efforts from both sides were to and they temperature seemed to be working. haslinda: this all comes at a very difficult time for narendra modi with the virus, the economy. has he said anything about it so far? >> no, there has been complete silence from prime minister modi on this conflict. india is facing a lot of challenges at the moment. here,is a virus epidemic the health system is already overwhelmed and its economy is really struggling following the lockdown. lose that many soldiers in a class with china and for modi to have said

nothing about it so far, yes, it will certainly pile the pressure on him domestically. haslinda: little said by india, little said by china as well. any sign that perhaps this could escalate? there is a lotk of work happening on both sides to make sure this does not escalate. analysts certainly are saying this is the most serious border spat in years and it's going to be difficult to walk back from it. is too many other challenges that both leaders are facing right now for them to let this go any further. what it does do is it is injecting further tensions into a relationship between the two already under is pressure over trade at a time when washington and beijing relations are at their lowest. this is the worst possible thing

that could have happened at this time. haslinda: south and southeast asia editor ruth pollard in new delhi. oil demand may not fully recover , according to the international energy agency executive director. he told bloomberg where he sees consumption bouncing back. >> we are seeing demand getting stronger. weaker thang less it was before, mainly driven by china. china's oil demand as we speak now is basically equal to what they had before the crisis. tom: what would you predict price would do? i don't want to quote to the pennies, but give me a sense of what oil does from 40.

higher, lower? i have no idea. >> there are so many uncertainties. word, it is expected by almost all the financial institutions to rebound. if there is no second wave of coronavirus, i would expect the oil crisis remain at these , giving a boost to some of the shale producers in the united states. that was the iea executive director. indian markets, taking a look at them. looking at the moment perhaps a negative start to the session. we are about 20 seconds away from the start of the trading day. we have already got price discovery so we are already

seeing weakness. the indian tycoon who built a fortune rolling out supermarkets across the country considering acquiring a controlling stake in india cements. we are also watching for anything more on these tensions between beijing and new delhi here as well. asianforget that infrastructure investment bake approving a loan to new delhi -- bank approving a loan to new delhi. the open is upon us. india cement, 8.5% up. spicejet also at the moment, ,lying in india right now flying about 25% of flights. broke -- larsen and toubro down.

we have got on the way, after a 100 day absence, the english premier league returns later today. we will be talking to the ceo of prenetics, a hong kong-based helpingwhich has been keep the game safe from the coronavirus. you are with bloomberg. ♪

♪ you are back with the

bloomberg markets. after months without football or able tofans will be tune into the english premier league when it resumes later today. the world's richest football competition is still uncertain about what lies ahead. >> what football is going to look like in a post covid environment i think, my views on that are going to be shaped by what happens in the next three months and how we start next season. this season has been significantly impacted by covid. we are hopeful that next season will be less impacted by covid on an organizational and financial perspective. obviously, we don't know the force of the virus. >> our next guest is on the front line of the fight to make life sports safe to resume, he is danny yeung, founder and ceo of prenetics. welcome to the program.

doing totly are you make these players safe and the staff safe here as well? danny: great to be back on the program. so certainly, prenetics, we are providing an end to end solution for covid-19 testing to the premier league. on awe are doing exactly, twice a week basis, we are testing players and coaches for covid-19. we have set up 20 testing sites around different stadiums. thus far, we have performed almost 10,000 tests and have found a positive covid-19 results. positiveound 16 covid-19 result. >> when you find these results, what do you do to analyze who has it? who analyzes any trends that give some actually pharmaceutical company a

breakthrough? very smalls still a number we are testing from the relative picture. certainly, we are analyzing the data to identify specific trends for different coaches or different teams. i think what's really important right now is today, the premier league returns, resumes the season. we are also launching a digital stadium,ssport at the which allows individuals to enter the stadium safely. we are understanding who has been tested, the positive results. >> that is the epl. i'm sure we will return to that later in the interview. you are also involved with other sports here as well. it must be pretty much the same thing that you do. who are you talking with? danny: so we are working with a number of sports organizations in the u.k.

include rugby, cricket, racing organizations. we cannot specifically name the organizations yet. we expect some announcements within the next few weeks. beennda: danny, there have a lot of fears of the accuracy of the tests you are doing for the epl. how accurate are they? are these tests in line with what the nhs, for instance, is doing? danny: yes. through programs which are quality assurance standards programs. we are tested to be in line with nhs standards, so there is no differentiation there. haslinda: are your tests scalable? you say you are doing the tests on players, coaches. can that be expanded to fans in

the future? what would that entail? is this the way to go in the future? danny: certainly. especially today, we launched the digital health passport. fans enter safety into the stadium. we are certainly working within sports. at the same time, we are working with the travel sector, multiple governments, airports, authorities, etc. in terms of how we can use real-time covid-19 testing to safely travel again. you have talked about how you want to make dna testing more accessible to the masses. the issue is cost. how realistic is it that cost can be brought down for what seems to be cutting edge technology? danny: are you referring to dna testing or covid testing? haslinda: dna testing. danny: for dna testing, this is

where our core business revolves. certainly right now, we are doing sequencing which is able genetically sequence code for a few hundred dollars. we certainly will be considered a market leader in hong kong, southeast asia, and in europe. >> tell me something here, danny. dna testing and covid testing, do you look at both of them together? i am going back to the previous question in a funny sort of way. is there any link which -- is there any linkage between the two? are you noticing any trend? danny: our core business was basically dna testing. within the last few months, we have actually pivoted and transformed a big part of our operations to serve the community for covid-19 testing. rdnad-19 testing is an

test. we don't do dna testing as part of the covid testing process. because we have been able to -- a lot of our logistic standards, we have been able to transform to be able to do covid-19 testing. our current daily capacity in our hong kong laboratory is 5580 samples of covid testing. we are looking to ramp that up to well over 10,000 on a daily basis, which makes us the largest private sector laboratory in hong kong. danny, ok, epl, right european premier league back in business later today. liverpool so far ahead, after all. danny: certainly, i don't think

about sports. it has a wider impact for the broader community. little bit by little bit getting back to normalcy so certainly we are proud to be playing a role. talk to usanny, about your ipo plans. you said before it is on track. when exactly will that happen? where will it ipo? danny: good question. certainly, we are headquartered in hong kong. now, we have about 150 people globally in 10 countries. we have strong momentum in the growth, triple digit growth in the last few years. certainly, i think at the right time we will be making the right announcement.

we are just happy to be playing a role in the community for covid-19 testing. danny yeung, prenetics group, thank you so much for joining us. let's take a look at where we are in terms of markets. let's start with the indian market. the centex and nifty both under pressure, pretty much in line with the region. indian equities had a volatile session yesterday but ended higher about 1%. the rupiah also under pressure. the first deadly crash -- clash in 45 years reigniting geopolitical risks. we have the nifty bank currently down about 1%. nifty 100 lower by 0.5%. >> yes. you talk about geopolitical tensions. of course, this is also very much in play on the korean peninsula. we had kim jong-un destroying

the joint korean office. north korea rejected the south's offer of envoy and peace talks. that's it for bloomberg markets. "daybreak: middle east" is next. ♪

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